The tumor microenvironment in pancreatic ductal adenocarcinoma (PDAC) involves a significant accumulation of fibroblasts as part of the host response to cancer. Employing single-cell RNA-sequencing, multiplex immunostaining, and several genetic mouse models, we identify carcinoma-associated fibroblasts (CAFs) with opposing functions in PDAC progression. Depletion of fibroblast activation protein (FAP)+ CAFs results in increased survival, in contrast to depletion of alpha smooth muscle actin (aSMA)+ CAFs that leads to decreased survival. Tumor-promoting FAP+ CAFs (TP-CAFs) and tumor-restraining aSMA+ CAFs (TR-CAFs) differentially regulate cancer-associated pathways and accumulation of Tregs. Improved efficacy of gemcitabine is observed when IL-6 is deleted from aSMA+ CAFs but not from FAP+ CAFs employing dual-recombinase genetic PDAC models. Improved gemcitabine efficacy due to lack of IL-6 synergizes with anti-PD1 immunotherapy to significantly improve survival of PDAC mice. Our study identifies functional heterogeneity of CAFs in PDAC progression and their different roles in therapy response.